Facebook Gets Through the Flood of Analyst Research Reports Unscathed

Social networking giant Facebook's FB 40-day silent period ended Wednesday, and predictably the analyst research reports flooded in. Following that period, which the brokers and investment banks are held to after an IPO, Facebook may feel that, after a rocky start, it came through fairly unscathed. Credit Suisse, Citi and Bank of America Merrill Lynch all initiated coverage at Neutral, with Bank of America stating that, while it is early in its opportunity to capitalize on its expansive social graph that includes over 900 million monthly users, "We are positive on long-term fundamentals given that 14% of all US online time spent and 8% of traffic to top Internet sites came from Facebook (Comscore), highlighting the sites' strong potential value to advertisers. However, the company is in the midst of a mobile usage transition and we are cautious on Facebook's revenue trends until new mobile ad revenue models start driving the top line." Piper Jaffray, J.P. Morgan and Morgan Stanley all initiated coverage at Overweight, with J.P. Morgan analyst Doug Anmuth in particular singing Facebook's praises. "As the underlying social fabric of the Web, Facebook is a unique platform asset with strong network effects, a deep competitive moat, and unparalleled social context," said Anmuth. "We believe the next phase of the Internet will be driven by data and powered by ubiquitous online access, and Facebook is well positioned here through its large and engaged user base, virtual ownership of the social graph, and unwavering focus on the user experience." Piper Jaffray put Facebook on a pedestal with Apple AAPL, Google GOOG, Amazon AMZN and Microsoft MSFT as one of the five most important companies on the web, stating that the 1-3 year picture is bright. Morgan Stanley, possibly a little sheepish following its role in the botched IPO, titled its report "The Start of the Social Era", with analyst Scott Devitt going on to say that, "We believe that Facebook is uniquely positioned to leverage its large and highly-engaged user base to monetize the mobile Internet." Oppenheimer told a similar story, initiating at Outperform and saying, "With the fragmentation of media and communication, we believe consumers will increasingly find media and information through their social graph, positioning FB in the middle of this information exchange." Goldman Sachs initiated at Buy, while claiming that social platforms like Facebook are helping to usher in the next era of the web. "In our view, given its user base and leading social platform, Facebook is poised to dominate this next phase of the internet and as such will maintain industry high growth rates throughout next decade. We believe concerns over “Facebook fatigue” are overstated while the potential for material upside to CPMs is underappreciated." On Wednesday, Facebook traded at around $32, down over 3%. Follow me @BCallwood.